Economically Speaking: Office of Public Counsel best paid for by assessment funding

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In his effort to balance the state's tight budget and free up general revenue money, Gov. Bob Holden has proposed alternative funding methods for several state programs. |ret||ret||tab|

One of those is the Office of Public Counsel, which serves as Missouri's consumer advocate in the regulation of utilities. |ret||ret||tab|

This office, established in 1975, is an independent agency that represents the interests of customers of regulated utilities before the Public Service Commis-sion and the courts. Both the PSC and OPC are divisions of the Department of Economic Development.|ret||ret||tab|

Even though the OPC has a small staff, it has effectively represented Missouri rate payers for years. |ret||ret||tab|

In fact, more than $300 million has been saved on behalf of Missouri consumers through the efforts of the OPC attorneys and technical staff in the last three years. |ret||ret||tab|

Not only does the OPC save money for Missouri consumers, but the office also advocates on behalf of consumers for other utility-re-lated issues. The office has a very important role.|ret||ret||tab|

Holden has proposed funding the OPC outside of the general revenue fund, which would free up the $930,000 current fiscal year appropriation for other purposes. |ret||ret||tab|

He calls for the use of assessment funding, which would place a small charge estimated to be less than 18 cents per year per customer on utility companies to fund the office. |ret||ret||tab|

If legislation providing for assessment funding is not passed, then state rate payers might not have representation. We certainly want to avoid that kind of result. |ret||ret||tab|

There has been a lot of misinformation about this issue and the governor's reasons for taking funding from the budget. The fact is we value the work done by the Office of Public Counsel on behalf of Missouri's consumers and believe the office should be continued. We believe, however, the office should be funded in a different way.|ret||ret||tab|

The proposal would fund the OPC in exactly the same way the PSC is funded. Assessment funding not general revenue has been the funding source of the PSC for years. |ret||ret||tab|

It just makes sense to fund the advocates for consumers the exact same way. This is the way most states, including Kansas and Iowa, fund these offices. Excluding states that utilize their attorneys general to represent utility consumers, 92 percent of state consumer advocate offices are funded through utility assessments.|ret||ret||tab|

Assessment funding is likely to be a more stable source of funding than general revenue where tight budgets could make it a target for funding cuts. |ret||ret||tab|

With its small budget, any fluctuations in funding could have a serious impact on the office's ability to represent consumers. |ret||ret||tab|

Funding fluctuations would not occur with this alternative method. The Gen-eral Assembly would still appropriate funding to the OPC each year but would use the new funding source.|ret||ret||tab|

Assessment funding also would be a more fair and equitable method because consumers would contribute to OPC's budget in relation to the number of regulated services they receive, just as they do now through PSC assessments. The office represents the interests of the consumers of regulated utilities; consumers of municipally owned utilities and consumers of electric and telephone cooperatives do not have regulated rates and do not benefit directly from the advocacy of the OPC in rate cases. |ret||ret||tab|

However, with general revenue funding, each taxpayer in Missouri contributes to the office's budget, whether or not they are served by one or more regulated utilities. |ret||ret||tab|

It is true that utility companies will pass the costs on to their customers. The same thing happens now with assessments for the PSC. |ret||ret||tab|

But the costs for the OPC are insignificant when spread out over all utility customers.|ret||ret||tab|

We believe if everyone takes time to seriously study this issue there will be strong agreement that this is a common sense, fair approach to funding the OPC. It will lead to a stronger office, paid for by those who benefit from its services, and paid for in the same way the PSC has been for years.|ret||ret||tab|

Assessment funding especially at an average cost of less than 18 cents per year makes good sense for Missouri.|ret||ret||tab|

(Joeseph L. Driskill is the director of the Missouri Department of Economic Development. )[[In-content Ad]]